Vietnam tourism industry surviving on domestic travelers

Vietnam’s tourism industry has been relying on the domestic market as the number of foreign travelers has decreased dramatically due to the global financial crisis.
Vietnam’s tourism industry has been relying on the domestic market as the number of foreign travelers has decreased dramatically due to the global financial crisis.
Luu Duc Ke, Director of Hanoitourist, said cooperation betwen travel firms, carriers and hotels that allowed them to slash tour fees by 50-60 percent has helped attract more domestic travelers.
Vietnamese travelers previously believed domestic tours had unreasonably high tour fees with tours from HCM City to the north and central region and vice versa even more expensive than outbound tours to neighboring countries Thailand, China, Malaysia and Singapore.
Many travel firms have reported satisfactory increases of up to 30 percent in the number of Vietnamese clients traveling domestically and an increase of 8-10 percent in the number of Vietnamese clients going abroad.
Tran The Dung, deputy director of The He Tre, also said decreased tour fees have helped attract more travelers. The He Tre was one of the travel firms that initiated the tourism promotion programme based on the commitment on airfare reductions by Vietnam Airlines.
“At first, some travel firms were reluctant to make contact with Vietnam Airlines. They thought they would not reach any agreement with such a large state-owned corporation. However, the cooperation has been successful in allowing travel firms to slash tour fees to lure more travelers,” Dung said.
According to HCM City Department of Culture, Sports and Tourism director La Quoc Khanh, the city’s number of domestic travelers has increased by 18 percent, while revenue from tourism is expected to increase by three percent in 2009 in comparison with 2008.
Travel firms now fear tour fee increases in 2010 when the tourism promotion programme ‘Impressive Vietnam’ ends.
Many hotels have announced hotel room rate increases from January 1, 2010. “We have signed contracts with hotels, but they still break their commitments,” says Nguyen Tuan Quyen, director of Thanh Nien Xung Phong Travel Firm.
Quyen also complains that travel firms will face more difficulties in 2010, when tax boosts for travel firms (payment delay and 50 percent VAT reduction) come to an end.
Travel firms in HCM City are urging the city’s Department of Culture, Sports and Tourism to extend ‘Impressive Vietnam’ until the end of June 2010.
Meanwhile, Ke said travel firms are working with Vietnam Airlines on continued cooperation in 2010.